KENYA PPP FRAMEWORK AND PROGRAMME … · PIIPs (Unsolicited Proposals) The PPP Act, 2013...
Transcript of KENYA PPP FRAMEWORK AND PROGRAMME … · PIIPs (Unsolicited Proposals) The PPP Act, 2013...
KENYA PPP FRAMEWORK AND PROGRAMME
INVESTORS CONFERENCE ON 140 MW OLKARIA PPP
GEOTHERMAL POWER PROJECT
The Public Private Partnerships Unit
National Treasury and Planning
WED 27th Nov., 2019
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Based on a policy of a private sector-led growth strategy
A deliberate desire to expand scope and opportunity for private sector efficiency and
innovation in public service design and delivery
Management of the delicate balance between expansive social and economic
imperatives/needs, and a narrowing fiscal space
Search for sustainable solutions in partnership models (the energy sector has shown
us that partnerships can be catalytic tools in the production of sustainable public
goods)
And a desire to accelerate delivery – both quantity and quality
Background And Strategic Context
Successful PPP Projects
3 Core tests/principles in PPP
Procurement:
Value for Money;
Affordability; and
Risk Transfer (optimal
allocation).
Solicited Bids
(Open &
Competitive)
Solicited Bids
(Open &
Competitive)
PIIPs
(Unsolicited
Proposals)
PIIPs
(Unsolicited
Proposals)
The PPP Act, 2013The PPP Act, 2013
Procurement of PPP
Projects
All EMPIRICAL Questions – the function of feasibility studies
FCCL assessment and approval a critical parameter in the large
scheme of approvals.
PROJECTS CAN BE INITIATED IN TWO WAYS
*: Cabinet Approval of the National Priority List
NB: Post financial close – project/contract management practices are regulated in the Act i.e. S65
•Pre-viability
Transaction Advisor
by Contracting
Authority
Step 1PPP Project
Proposal
Step 1PPP Project
Proposal
Step 2 Feasibility
Study Report
Step 2 Feasibility
Study Report
Step 3
EvaluationReport
Step 3
EvaluationReport
Step 4Project & Financial Risk Assessment
Report
Step 4Project & Financial Risk Assessment
Report
Step 5 Contract
Execution
Step 5 Contract
Execution
Financial Close
Financial Close
PPP
Committee
Approval*
PPP
Committee
Approval
PPP
Committee
Approval
PPP
Committee
Approval
Cabinet
Approval
The PPP process is structured and sequentialwith review and approval steps built-in
at various stages of the project’s life cycle
The PPP Process
CABINET
PPP Project
Clearance
PPP Committee
PPP Unit
PPP Node
PPP Petition
Committee
PPP Institutional Framework
So…where are we? (2013 - 2019)
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Total Project Pipeline as at Nov 2019: 80 projects – out of which:
1 – Feasibility Study Stage
1 - Construction (Financial Close)
11 – Signed Contracts (Commercial Close)
8 – Contract Negotiation Stage
4 – Actively in Tender Stage
1 – Feasibility Study Concluded – pending regulatory
approval for next steps
5 – Ready for Tender Initiation – Feasibility Studies
Complete – Approval to Procure Granted
31 - Front-runner Projects - at different preparation/ development stages
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No. Key Milestone in the
PPP Process
Projects Project Details
1 Financial Close 1 1. Lot 33 of Road Annuity Program: Ngong-Isinya,
Kajiado-Imaroro road
2 Commercial Close 11 1. Lot 3 of Road Annuity Programme- Modogashe-
Habaswein-Samatar
2. 35 MW Sosian Menengai Geothermal Power Plant
3. 35 MW Quantum Menengai Geothermal Power Plant
4. 35 MW Orpower22 Geothermal Power Plant
5. 1,050 MW Coal Power Plant in Lamu
6. Kenyatta University Student Hostels
7. Likoni Cable Car Project in Mombasa
8. Lot 15 of Road Annuity Programme
9. Lot 18 of Road Annuity Programme
10. Lot 32 of Road Annuity Programme
11. Nairobi JKIA-James Gichuru Road Expressway
Summary of Front-runner Projects
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No. Key Milestone in the PPP
Process
Projects Project Details
3 Projects at Contract
Negotiations
8 1. Nairobi-Nakuru- Mau Summit Highway
2. Lot 8 of Road Annuity Programme
3. Lot 10 of Road Annuity Programme
4. Lot 20 of Road Annuity Program
5. O&M of Lamu Port
6. Lamu –Garissa-Isiolo Highway
7. KCB Usalama Police Housing
8. Naivasha Special Economic Zone
4 Tender Stage 4 1. 2nd Nyali Bridge
2. Lot 6 of Road Annuity Programme
3. 140 MW Olkaria PPP Geothermal Power Project
4. KNH PPP Hospital Project
Summary of Front-runner Projects (2)
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No. Key Milestone in the PPP
Process
Projects Project Details
5 Ready for Tender 5 1. O&M Nairobi-Thika Highway
2. O&M Nairobi Southern Bypass
3. Nairobi-Mombasa Highway
4. O&M Shimoni Port
5. Nanyuki Bulk Water Supply
6 Completed Feasibility
Studies
1 1. Murang’a Water Supply
7 Project at advanced stages
of Feasibility Study
1 1. Nakuru Integrated Solid Waste Management Project
31 Front-runner PPP Projects, estimated $15.6B in projected private sector capital
mobilization = the road is well-laid, the future is promising, and we are restructuring and
repositioning ourselves for faster delivery in order to meet the massive expectations of
Kenyans for first-rate public services …. Where PPPs can be the solution bearer
Summary of Front-runner Projects (3)
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Our Market Drivers
1. A stable law on PPPs
2. Established and mature PPP institutions
3. A supportive policy and stable political environment for PPPs
4. A positive macroeconomic framework
5. Progressive economic fundamentals
6. Maturing financial sector
7. De-risking and credit enhancing tools
Drivers
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Ticks all the strategic drivers for PPPs in Kenya Allows for innovation and private sector efficiency
Promotes improved public service delivery by KenGen (public function)
Amenable to output-based performance-linked contracting (SMART)
Externalizes financing for the public good (off-balance sheet transaction)
Extends and actualizes the GoK Big 4 Agenda as one of the enablers for especially
Agenda 1- Enhancing Manufacturing
Provides opportunity for strategic power generation design between KenGen and
the private sector, guided by Kenya’s energy sector policies (which also recognize
the role for PPPs in expanding access to energy). The energy sector has a long
history of Independent Power Producers (IPPs), and this project shall be one of the
IPPs.
The Project’s Goodness of Fit
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We wanted to tell you this good story
Make you understand us, our business, our strategy, our vision, our plan, and the
opportunities for investment in PPPs
We are open to business, and for those of you planning to bid for this project, the
tender is open: apply for qualification! Help us actualize this dream for KenGen
We will select you carefully! In your strength, lies our success!
Our Promise: WE WILL PLAY FAIR.
OUR ACTIONS ARE JUSTICIABLE.
Hence this Conference!
THANK YOU!
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